Jaycee's department store chain is planning to open a new store. It needs to decide how to allocate the 100,000 square feet of available floor space among seven departments. The accompanying data includes the expected performance of each department per month, in terms of square feet (sf). The
company has gathered $20 million to invest in floor stock. The risk column is a measure of risk associated with investment in floor stock based on past data from other stores and accounts for outdated inventory, pilferage, breakage, and so on. For instance, electronics loses 24% of its total investment, furniture loses 12% of its total investment, and so on. The amount of risk should be no more than 10% of the total investment. Assume that it is not required that the entire available floor space be used. Answer parts a and b below.
- Jaycee S Department Store Chain Is Planning To Open A New Store It Needs To Decide How To Allocate The 100 000 Square 1 (22.78 KiB) Viewed 39 times
a. Develop a linear optimization model to maximize profit. Complete the table below to indicate the number of square feet per department, and then give the total profit.
a. Develop a linear optimization model to maximize profit. Complete the table below to indicate the number of square feet per department, and then give the total profit.
- Jaycee S Department Store Chain Is Planning To Open A New Store It Needs To Decide How To Allocate The 100 000 Square 2 (7.76 KiB) Viewed 39 times
Expected Performance Data Department Electronics Furniture Men's Clothing Clothing Jewelry Books Appliances Investment/sf $100 $50 $30 $600 $900 $50 $400 Risk as a % of $ invested 24 12 5 10 14 2 3 Minimum of 7,000 12,000 2,000 4,000 1,000 1,000 13,000 Maximum sf 30,000 30,000 5,000 40,000 11,000 6,000 42,000 Expected Profit per sf $13.00 $6.00 $3.00 $31.00 $20.00 $1.00 $14.00 1
Electronics Furniture Men's Clothing Clothing Jewelry Books Appliances Total profit = $ Square feet 000